a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 17 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the profitability index if the discount rate is 25 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
Section4.12: Uneven, Or Irregular, Cash Flows
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Consider the following cash flows:
Year
Cash Flow
-$28,700
15,000
13,900
10,300
3
a. What is the profitability index for the cash flows if the relevant discount rate is 12
percent? (Do not round intermediate calculations and round your answer to 3
decimal places, e.g., 32.161.)
b. What is the profitability index if the discount rate is 17 percent? (Do not round
intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
c. What is the profitability index if the discount rate is 25 percent? (Do not round
intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)
a. Profitability index
b. Profitability index
c. Profitability index
O123
Transcribed Image Text:Consider the following cash flows: Year Cash Flow -$28,700 15,000 13,900 10,300 3 a. What is the profitability index for the cash flows if the relevant discount rate is 12 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) b. What is the profitability index if the discount rate is 17 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) c. What is the profitability index if the discount rate is 25 percent? (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.) a. Profitability index b. Profitability index c. Profitability index O123
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